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Economic grand rounds: the price is right? Changes in the quantity of services used and prices paid in response to parity.

ABSTRACT: The impact of parity coverage on the quantity of behavioral health services used by enrollees and on the prices of these services was examined in a set of Federal Employees Health Benefit (FEHB) Program plans. After parity implementation, the quantity of services used in the FEHB plans declined in five service categories, compared with plans that did not have parity coverage. The decline was significant for all service types except inpatient care. Because a previous study of the FEHB Program found that total spending on behavioral health services did not increase after parity implementation, it can be inferred that average prices must have increased over the period. The finding of a decline in service use and increase in prices provides an empirical window on what might be expected after implementation of the federal parity law and the parity requirement under the health care reform law.

SUBMITTER: Goldman HH

PROVIDER: S-EPMC3773179 | biostudies-literature | 2012 Feb

REPOSITORIES: biostudies-literature

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Economic grand rounds: the price is right? Changes in the quantity of services used and prices paid in response to parity.

Goldman Howard H HH Barry Colleen L CL Normand Sharon-Lise T SL Azzone Vanessa V Busch Alisa B AB Huskamp Haiden A HA

Psychiatric services (Washington, D.C.) 20120201 2

The impact of parity coverage on the quantity of behavioral health services used by enrollees and on the prices of these services was examined in a set of Federal Employees Health Benefit (FEHB) Program plans. After parity implementation, the quantity of services used in the FEHB plans declined in five service categories, compared with plans that did not have parity coverage. The decline was significant for all service types except inpatient care. Because a previous study of the FEHB Program fou ...[more]

PMID: 22302324

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Project description:ImportanceHigh out-of-pocket drug costs can cause patients to skip treatment and worsen outcomes, and high insurer drug payments could increase premiums. Drug wholesale list prices have doubled in recent years. However, because of manufacturer discounts and rebates, the extent to which increases in wholesale list prices are associated with amounts paid by patients and insurers is poorly characterized.ObjectiveTo determine whether increases in wholesale list prices are associated with increases in amounts paid by patients and insurers for branded medications.Design, setting, and participantsCross-sectional retrospective study analyzing pharmacy claims for patients younger than 65 years in the IBM MarketScan Commercial Database and pricing data from SSR Health, LLC, between January 1, 2010, and December 31, 2016. Pharmacy claims analyzed represent claims of employees and dependents participating in employer health benefit programs belonging to large employers. Rebate data were estimated from sales data from publicly traded companies. Analysis focused on the top 5 patent-protected specialty and 9 traditional brand-name medications with the highest total drug expenditures by commercial insurers nationwide in 2014. Data were analyzed from July 2017 to July 2020.ExposuresCalendar year.Main outcomes and measuresChanges in inflation-adjusted amounts paid by patients and insurers for branded medications.ResultsIn this analysis of 14.4 million pharmacy claims made by 1.8 million patients from 2010-2016, median drug wholesale list price increased by 129% (interquartile range [IQR], 78%-133%), while median insurance payments increased by 64% (IQR, 28%-120%) and out-of-pocket costs increased by 53% (IQR, 42%-82%). The mean percentage of wholesale list price accounted for by discounts increased from 17% in 2010 to 21% in 2016, and the mean percentage of wholesale list price accounted for by rebates increased from 22% in 2010 to 24% in 2016. For specialty medications, median patient out-of-pocket costs increased by 85% (IQR, 73%-88%) from 2010 to 2016 after adjustment for inflation and 42% (IQR, 25%-53%) for nonspecialty medications. During that same period, insurer payments increased by 116% for specialty medications (IQR, 100%-127%) and 28% for nonspecialty medications (IQR, 5%-34%).Conclusions and relevanceThis study's findings suggest that drug list prices more than doubled over a 7-year study period. Despite rising manufacturer discounts and rebates, these price increases were associated with large increases in patient out-of-pocket costs and insurer payments.

Project description:ImportanceSeveral states have passed surprise-billing legislation to protect patients from unanticipated out-of-network medical bills, yet little is known about how state laws influence out-of-network prices and whether spillovers exist to in-network prices.ObjectiveTo identify any changes in prices paid to out-of-network anesthesiologists at in-network facilities and to in-network anesthesiologists before and after states passed surprise-billing legislation.Design, setting, and participantsThis retrospective economic analysis used difference-in-differences methods to compare price changes before and after the passage of legislation in California, Florida, and New York, which passed comprehensive surprise-billing legislation between January 1, 2014, and December 31, 2017, to 45 states that did not. Commercial claims data from the Health Care Cost Institute were used to identify prices paid to anesthesiologists in hospital outpatient departments and ambulatory surgery centers. The final analytic sample comprised 2 713 913 anesthesia claims across the 3 treated states and the 45 control states.ExposuresTemporal and state-level variation in exposure to surprise-billing legislation.Main outcomes and measuresThe unit price (allowed amounts standardized per unit of service) paid to out-of-network anesthesiologists at in-network facilities and to in-network anesthesiologists.ResultsThis retrospective economic analysis of 2 713 913 anesthesia claims found that after surprise-billing laws were passed in 3 states, the unit price paid to out-of-network anesthesiologists at in-network facilities decreased significantly in 2 of them: California, -$12.71 (95% CI, -$25.70 to -$0.27; P = .05) and Florida, -$35.67 (95% CI, -$46.27 to -$25.07; P < .001). In New York, a decline in the overall out-of-network price was not statistically significant (-$7.91; 95% CI, -$17.48 to -$1.68; P = .10); however, by the fourth quarter of 2017, the decline was -$41.28 (95% CI, -$70.24 to -$12.33; P = .01). In-network prices decreased in California by -$10.68 (95% CI, -$12.70 to -$8.66; P < .001); in Florida, -$3.18 (95% CI, -$5.17 to -$1.19; P = .002); and in New York, -$8.05 (95% CI, -$11.46 to -$4.64; P < .001).Conclusions and relevanceThis retrospective study found that prices paid to in-network and out-of-network anesthesiologists in hospital outpatient departments and ambulatory surgery centers decreased after the introduction of surprise-billing legislation, providing early insights into how prices may change under the federal No Surprises Act and in states that have recently passed their own legislation.

Dataset Information

Economic grand rounds: the price is right? Changes in the quantity of services used and prices paid in response to parity.

Publications

Economic grand rounds: the price is right? Changes in the quantity of services used and prices paid in response to parity.

Similar Datasets

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